Gas Summary at European Close: TTF Falls Sharply

TTF front month has extended and fallen below €50/MWh with near normal weather and high storage levels helping to curtail last week’s gains from geopolitical tensions.

• TTF NOV 23 down -9.6% at 48.8€/MWh
• TTF Q1 24 down -5.6% at 54.35€/MWh
• The Q1 2024 -Nov 2023 spread has bounced back up to around 5.25€/MWh from the lowest since June at 3.14€/MWh at the end of last week supported by risks from a cold winter, greater demand in mainland China and unplanned supply outages.
• The latest weather forecast shows temperatures in NW and central Europe holding mostly near normal throughout the coming two weeks. The current extended range month ahead forecasts suggest near on slightly below normal in the first half of November.
• Union workers this weekend voted in a ballot held by the Offshore Alliance to reaffirm strike action from 19 October at Chevron’s Gorgon and Wheatstone LNG facilities, the Offshore Alliance said via Facebook.
• Norwegian pipeline supplies to Europe are relatively unchanged in recent days with today nominated at 328.8mcm/d. The 10mcm Troll outage has been extended by two days until 19 October.
• European natural gas storage is up to 97.89% full on 14 Oct above the five year range according to GIE data after high end of season injection rates.
• Net injections have increased in the last week above the average rates from the previous five years. Net injections averaged about 1,814GWh/d in the week to 14 Oct compared to the five year average for the period of 1,370GWh/d.
• European storage inventories at the end of winter are likely to be significantly lower than last year but the region should have ample gas with a normal winter according to Timera Energy.
• LNG net import flows have averaged around 320mcm/d in the week to 14 Oct according to Bloomberg compared to approximately 400mcm/d seen this time last year.
• Total flexible LNG supply above destination-specific contract levels is set to rise 21% to 51.5m metric tons this winter due to higher output from Freeport LNG in the US according to BNEF. Some added flexible supply volumes will come from the Pacific Basin and Middle East and Africa
• Ukraine increased natural gas flows from the EU and Moldova sevenfold on the year in April-October to 3bcm, which includes 2.4bcm of gas for Ukraine gas storage from foreign companies according to the Energy Ministry